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India saw its domestic crude oil production drop by 2.3 percent in August compared to August 2020, government data showed on Wednesday, while India is estimated to have significantly boosted its oil imports last month compared to previous months.
In August 2021, India’s crude oil production slipped due to lower crude production from oilfields operated by state-held Oil and Natural Gas Corporation (ONGC), the PTI news outlet reported, citing the government data.
Natural gas production, however, jumped by 20.23 percent, thanks to higher output from recently started up gas fields operated by oil-to-telecoms conglomerate Reliance Industries and supermajor BP.
India’s refineries operated at 87 percent of their combined installed capacity last month, compared to a utilization rate of just 76.1 percent in August last year.
India, the world’s third-largest oil importer, depends on imports for 85 percent of its petroleum demand.
In August, India’s oil imports surged by 23 percent month-on-month to reach a four-month high of 4.2 million barrels per day (bpd), amid refiners preparing to ramp up crude throughputs for the festival season that starts next month, Reuters reported on Tuesday, citing tanker data from trade sources.
Last month’s oil imports in India reached a four-month high after several months of lower shipments due to the resurgence of COVID cases in the spring, weakened fuel demand that came with the coronavirus spread in April and May, and refinery maintenance in July.
Indian oil imports rebounded in August as refiners bought more crude in anticipation of raising their fuel production just in time for the festival season in October and November.
Last month, India imported more oil from the United States and Latin America, with cargoes booked in May-June thanks to arbitrage, according to trade sources’ data obtained by Reuters. The incremental purchases of crude from the Americas left the Middle East with a lower share of India’s oil imports last month—at 61.8 percent, it was down from 64.7 percent in July.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com